Banking union: EU leaders leave many issues unanswered

EU leaders have agreed to allow the European Central Bank to supervise banks from next year, but questions remain about how the process will work, which lenders will be involved and whether those in trouble can be helped.

The European Commission has proposed making the ECB responsible for supervision as a step towards a banking union in which euro zone countries and any others that want to join would together resolve problem banks and protect savers' deposits.

But at a meeting of EU leaders that ended on Friday, issues such as what method will be used to accommodate non-euro nations that join the scheme, how many banks the ECB will directly supervise and whether that can lead to countries sharing the cost of resolving problems, were left undecided. German Chancellor Angela Merkel acknowledged that the details needed to be worked out, including how the new supervision will fit with existing regulatory structures.

Poland, a non-euro-member country that is interested in joining the banking union scheme, underscored the complexity of the negotiations that lie ahead if the new supervision is to become a reality in the course of next year.

Investors are following the negotiations closely in part because they expect cross-border supervision to allow the euro zone rescue fund, the European Stability Mechanism (ESM), to inject capital directly into struggling lenders.

Will veto EU budget if not acceptable: UK

Britain is prepared to block any EU budget deal that it deems unacceptable and against its national interests, Prime Minister David Cameron said on Friday ahead of budget negotiations next month.

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